Northern Berkshire Healthcare: 'We can no longer continue'

Nashoba Publishing

Posted:
03/26/2014 09:49:23 AM EDT

By Michael Norton and Andy Metzger

STATE HOUSE NEWS SERVICE

STATE HOUSE -- The board of Northern Berkshire Healthcare, which serves 40,000 people in the Berkshire County, Vermont and New York, has approved a resolution calling for the closure on Friday of its major medical practices in the region in response to the company's "worsening financial status."

The board voted to close the 129-year-old North Adams Regional Hospital, the Visiting Nurse Association & Hospice of Northern Berkshire, and three medical practices owned by Northern Berkshire Healthcare.

NBH said area residents who would otherwise be treated in the emergency room of North Adams Regional Hospital, which will close at 10 a.m. Friday, may seek emergency care instead at Berkshire Medical Center in Pittsfield and Southwestern Vermont Medical Center in Bennington, Vermont.

"In the six years that I have been on the Board we have investigated every possible avenue and exhausted all options as we searched for a way to continue operating the hospital and its affiliates," board chair Julia Bolton said in a statement. "Board members, management, physicians, and employees have worked together with dedication and commitment to prevent this outcome. But now, given our finances and the daunting challenges that small rural community hospitals are facing in this healthcare environment, we can no longer continue.

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The plans jolted a Massachusetts health care system where policymakers have focused on access to care and cost control amid industry consolidation that has left a few major players in control of vast health care networks.

According to the NBH, which employs about 530 people in full and part-time jobs, employees will receive layoff notices and assistance in filing for unemployment benefits. Northern Berkshire Healthcare Physicians Group includes Northern Berkshire Family Medicine, Northern Berkshire OB/GYN, and Northern Berkshire General Surgery, all in North Adams.

Sen. Benjamin Downing (D-Pittsfield) posted a statement in respond to the closure announcement.

"The Northern Berkshires need a hospital. Everyone in the region - patients and employees, most acutely - will be impacted by the Board's decision today," Downing said. "I firmly believe this could have and should have been avoided. In the coming days, I will do everything in my power to ensure access to critical healthcare services, to support the community and the workers and to help answer the many questions we all have."

A state Department of Public Health spokesman on Tuesday night could not provide any information about the company's method of notifying the department of its closure plans, or whether there are any legal requirements in order for a health care facility to shut down.

The Massachusetts Nurses Association said the hospital provided only three days' notice to patients and staff.

"We are not convinced that the board of trustees and management have fulfilled the legal requirements to allow the closure of this facility, and in any case, to do so in this manner is unacceptable," the Massachusetts Nurses Association said in a Tuesday statement. It said, "The closing highlights a growing crisis in Massachusetts where the consolidation of hospitals into large corporate networks (such as Baystate Health and Partners), has left smaller community hospitals, particularly those that serve poorer communities, more vulnerable, with no source of support to ensure all communities have access to the care and services they need."

Attorney General Martha Coakley, who grew up in North Adams and oversees the health care industry as the state's consumer advocate, said the hospital has been in bad financial shape.

"I do know that hospital, obviously where I grew up, is something that's had significant financial problems for a long period of time," Coakley told the News Service after a gubernatorial debate at Boston Public Library.

Coakley said her office had been working with the organization and suggested it was unable to meet payroll.

"They have an obligation as a not-for-profit to show that they can be solvent, so they have been one of the hospitals that we consider on a watch-list because we know the finances have been problematic. I don't know much more about it," Coakley said. "They have to be able to meet their payroll, and they must have made the determination that they're not going to be able to do it."

A 2012 audit of the Northern Berkshire Healthcare, Inc, and subsidiaries, posted on the attorney general's website said several entities, including the hospital, filed for bankruptcy in 2011, and were merged into Northern Berkshire Healthcare in 2012. The hospital had a $914,141 endowment, according to the audit, and $64.9 million in "functional expenses."

"Current economic conditions, including the rising unemployment rate, have made it difficult for certain of our patients to pay for services rendered," the 2012 audit stated. "As employers make adjustments to health insurance plans or more patients become unemployed, services provided to self-pay and other payers may significantly impact net patient service revenue, which could have an adverse impact on the System's future operating results."

The nurses association, which condemned the Tuesday afternoon closure announcement, said it would work with public officials and others to seek to save the hospital or "at least ensure a safe transition" for the hospitals patients.

"NARH is a community hospital that provides desperately needed emergency and inpatient care to an isolated, rural community in the northwest corner of the state," said the MNA statement. "It is outrageous to close this hospital so abruptly with no plan in place for the patients impacted by this callous decision."

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